Policy measures taken

FSB members have adopted a range of measures to ensure that the financial system is able to respond to the pandemic. Actions fall into five broad categories:

  1. Lending and credit support – including actions to ensure that financial institutions are able to continue lending, such as loan guarantee schemes, restructuring of loan terms, or the release of countercyclical capital buffers and encouragement to use capital and liquidity buffers.

  2. Funding and liquidity support – including actions by authorities to support funding markets in domestic currency, for instance through bank and market funding facilities or asset purchases, as well as facilities that provide access to foreign currency.

  3. Market functioning – steps by markets authorities to support the operations of markets, including enhanced market surveillance or volatility control mechanisms.

  4. Operational and business continuity of financial institutions – including engagement with financial institutions to ensure that they have robust measures in place so they can continue to maintain their activities.

  5. Authority business continuity measures – actions taken by authorities to ensure the continuity of their supervisory and regulatory activities.

The FSB report COVID-19 pandemic: Financial stability implications and policy measures taken – Report to the G20published in July includes an overview of the types of measures taken by FSB member jurisdictions.

FSB principles

The FSB’s response to COVID-19 is underpinned by five principles:

  • to monitor and share information on a timely basis to assess and address financial stability risks from COVID-19;

  • to recognise and use the flexibility built into existing financial standards to support our response;

  • to seek opportunities to temporarily reduce operational burdens on firms and authorities;

  • to act consistently with international standards, and not roll back reforms or compromise the underlying objectives of existing international standards; and

  • to coordinate on the future timely unwinding of the temporary measures taken.

The FSB Principles have guided national responses to COVID-19 to date. The international standards adopted through the G20 reforms have discouraged unilateral actions that would distort the level playing field and lead to market fragmentation. Most measures taken by FSB members to deal with the COVID-19 shock have used the flexibility available in international standards by design, including in the form of system-wide and firm-specific buffers. In a few cases individual temporary measures went beyond the flexibility of those standards, in order to respond to extreme financial conditions and provide operational flexibility to financial institutions.

Cooperation and coordination

SSBs are continuing to closely monitor developments and have all announced policy and operational measures aimed at supporting these goals. The FSB is actively coordinating with SSBs on issues that cut across sectors. The FSB and SSBs are:

  • sharing information on, and considering whether there are areas for collaboration to promote the effectiveness of, the steps authorities and the private sector are taking to temporarily mitigate lending terms for borrowers.

  • coordinating steps to support the business continuity of financial services firms, both through facilitating remote working and enabling those essential staff who need to work onsite to do so.

  • coordinating their responses to enable firms and authorities to focus their resources on COVID-19 response by delaying existing deadlines for implementation of international reforms and of other international regulatory initiatives, where this can be done in a way that remains consistent with the underlying objectives of the reforms.

COVID-19 statements by the G20, FSB and standard-setting bodies